Stadium score: public trounced, Loria and Tampa Bay win
The final score is in at Marlins Stadium: Jeffrey Loria & Co. got $1.2 billion, taxpayers got $5.5 million in profit sharing and billions in debt, and Tampa Bay got a big lesson in how not to cut its own ballpark construction deal.
The final chapter was written as Mr. Loria agreed last week to give the public $5.5 million from the team sale, which is about all taxpayers will ever get from the Marlins as they pay $3 billion total for a stadium that Mr. Loria had demanded. Almost everything but that goes for decades to team owners, past and present.
A stadium construction agreement in 2009 provided 5% of team sale profit to taxpayers. The Miami Marlins were worth $250 million before the stadium and sold for $1.2 billion afterward. Simple math makes that a $950 million gain, with $47.5 million due to taxpayers.
But it wasn’t that simple: Miami-Dade had signed a contract with so many loopholes that Mr. Loria said he actually lost on the deal. He offered to settle for $4 million-plus but commissioners waffled. Then last week commission Chairman Jose “Pepe” Diaz bypassed the mayor’s team to get $1 million more from Mr. Loria.
That’s a victory if you don’t know what you’re entitled to. Commissioners didn’t know because they never got the facts. So they took the offer – just as they didn’t know the actual cost in 2009 when they approved paying $3 billion for the ballpark.
If this sounds like a comedy of errors, it’s errors all the way but not comedy – unless wasting billions in tax funds is funny.
Across the state in Tampa Bay, city and county officials are taking a lesson from all this as they hire professionals to negotiate the future of their own baseball team.
The experts won’t have to do much – just do the opposite of what Miami-Dade did with Marlins owners for almost 15 years.
Miami-Dade and the City of Miami did everything in-house in deals with team owners, who hired experts and took taxpayers to the cleaners at every step. County staff never even gave elected officials the financial data in their rush to get a ballpark at any cost – which is exactly what they got.
In Tampa Bay, officials said last week they will solicit companies that have successfully negotiated with baseball or other teams on behalf of local government.
The hired firm, they said, must be expert in stadium financing, big league ballclub economics, negotiating with redevelopment on a pro sports franchise, and helping local governments consider stadium financing.
Imagine if Miami-Dade had hired experts on stadium financing in 2009, when for just one slice of the spending it agreed to borrow $80 million for which taxpayers will pay off more than $1.2 billion. That would be inconceivable – but it happened, and commissioners never knew until it they had voted yes.
If we’d had an expert, we’d never have let Mr. Loria & Co. con us in 2009 about needing a stadium on their terms or else they’d move to Las Vegas. An expert would have told the county that was a big bluff – which the team president later bragged about.
But the county knew better in 2009 than to spend hundreds of thousands on an expert when it could waste hundreds of millions by cutting the deal in house. Just as the county knew in 2021 that letting the commission chairman deal with the same former owners rather than use experts, or even lawyers, was the best route.
At every step, Miami-Dade didn’t bother with experts or facts.
That’s why we didn’t know in 2009 how much the stadium would cost until commissioners voted yes, just as they didn’t know this year how much the county was really entitled to when it settled for table crumbs to conclude a miserable saga of government waste.
Was bypassing the administration to let the commission chairman deal for another $1 million a victory or an epic failure? Because commissioners never got the financial data they wanted, they will never know.
Just as they never knew in 2009 until it was far too late how much they were really spending on the stadium.
Bringing in expert advisers and negotiators is not cheap. Miami-Dade saved money by not using them at all – but the losses in the stadium deal outweigh the savings by hundreds of millions, and perhaps by billions.
Let’s hope Tampa Bay doesn’t try to cut corners on negotiators at the expense of facts as Miami-Dade did when it flew blind on data and let the billions fly away.